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Question
Simons purchased a home for $120,000, insuring it for $120,000 with Mutual Life. She later purchased a $60,000 policy from Equitable. The home was totally destroyed by fire while it still had a fair market value of $120,000 and the losses amounted to $30,000. Under these circumstances, which of the following statements is true?
A. Simons can claim the damages only from Mutual Life as its policy amount is greater.
B. She cannot claim insurance from either as policies with pro rata clauses cover only partial losses.
C. Simons can recover $180,000the total of both policies, as part of his insurance contract.
D. Simons cannot claim more than $60,000 from Equitable.
Answer
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